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Caste as an Impediment to Trade

  • Siwan Anderson

We compare outcomes across two types of villages in rural India. Villages vary by which caste is dominant (owns the majority of land): either a low or high caste. The key finding is that income is substantially higher for low-caste households residing in villages dominated by a low caste. This seems to be due to a trade breakdown in irrigation water across caste groups. All else equal, lower caste water buyers have agricultural yields which are 45 percent higher if they reside in a village where water sellers are of the same caste compared to one where they are not. (JEL O12, O13, O17, O18, Q15, R23, Z13)

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/app.3.1.239
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Article provided by American Economic Association in its journal American Economic Journal: Applied Economics.

Volume (Year): 3 (2011)
Issue (Month): 1 (January)
Pages: 239-63

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Handle: RePEc:aea:aejapp:v:3:y:2011:i:1:p:239-63
Note: DOI: 10.1257/app.3.1.239
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  1. Timothy Besley & Robin Burgess, 1998. "Land reform, poverty reduction and growth : evidence from India," LSE Research Online Documents on Economics 2018, London School of Economics and Political Science, LSE Library.
  2. Akerlof, George A, 1976. "The Economics of Caste and of the Rat Race and Other Woeful Tales," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 599-617, November.
  3. Jacoby, Hanan G. & Murgai, Rinku & Rehman, Saeed Ur, 2001. "Monopoly power and distribution in fragmented markets : the case of groundwater," Policy Research Working Paper Series 2628, The World Bank.
  4. Abhijit Banerjee & Lakshmi Iyer, 2005. "History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India," American Economic Review, American Economic Association, vol. 95(4), pages 1190-1213, September.
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